Our view: A hybrid idea for a big problem

Herald editorial board Minnesota Gov. Tim Walz is proposing an increase in the state's fuel tax to help fund road and infrastructure repairs. It's a 20 cents-per-gallon hike, or a $3 to $4 increase for most people who fill their tank. Minnesota's...

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Herald editorial board |
Apr 24th 2019 - 9am.

Herald editorial board

Minnesota Gov. Tim Walz is proposing an increase in the state's fuel tax to help fund road and infrastructure repairs. It's a 20 cents-per-gallon hike, or a $3 to $4 increase for most people who fill their tank.

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Minnesota's current tax is 28.6 cents per gallon, near the national average. Going up 20 cents would put Minnesota's fuel tax at No. 4 in the nation. That's a high ranking, but the St. Paul Pioneer Press has reported that Minnesota's Department of Transportation needs $39 billion over the next two decades to meet road performance and safety targets. Some dollars can be counted on from existing sources, but MnDOT expects to come up about $18 billion short - or nearly $1 billion annually.

Generally, we favor an increase in the gas tax, since we believe taxes on fuel purchases are distributed fairly among people who use roads. Adding surcharges onto, say, license fees or auto sales is technically not fair. After all, an elderly couple may pay the same amount for a license or registration and rarely drive in a year, while a younger family may drive tens of thousands of miles per year.

So yes, an increase in Minnesota's gas tax - which hasn't been raised in more than a decade - seems fair.

Not everyone agrees. The Minnesota Chamber of Commerce recently conducted a poll that showed dislike for Walz's 20-cent increase proposal. Of 500 registered voters surveyed, 65 percent are opposed to the plan. It's especially distasteful to outstate Minnesota, where 75 percent of those surveyed are against it.

However, a Star Tribune and Minnesota Public Radio survey of 800 people found that 56 percent of those polled supported a 10-cent gas tax increase to maintain roads and bridges. That poll didn't include a 20-cent option.

So, considering Minnesota's infrastructure needs; and considering the general dislike for the idea of a 20 cents-per-gallon increase; and considering the Star Tribune-MPR survey that showed support for an increase of 10 cents per gallon, here's an alternative: Push for a smaller increase in the gas tax, while allocating other dollars to help fund bridge and road repair.

For example, all sales taxes on car rentals and half of taxes currently collected on auto parts sales now go toward road and infrastructure repair in Minnesota. The other half of parts sales taxes currently goes into the state's general fund.

The Minnesota Chamber of Commerce suggests directing all taxes on auto parts sales toward road and infrastructure repairs. That-coupled with the existing taxes on rentals-would amount to $300 million annually. Harm to the general fund would be miniscule, since $300 million represents just 1 percent of the fund's total.

It's a good idea, but it still doesn't fully answer the issue of fairness. That's why we believe a small increase in the gas tax, coupled with some sort of rededication of taxes from auto parts sales, is a reasonable alternative.

It also is a nod toward the future, since gas tax revenues likely will decrease over time as hybrid and electric vehicles become more prevalent.